Kobe Aluminum Automotive Products to expand production facilities for aluminum forged suspension products

April 28, 2017

Kobe Steel, Ltd.
Mitsui & Co., Ltd.
Toyota Tsusho Corporation

TOKYO, April 28, 2017 — Kobe Aluminum Automotive Products, LLC (or KAAP), a U.S. joint venture, plans to further expand its production facilities to meet the rising demand in North America for aluminum forged suspension products.

Based in Bowling Green, Kentucky, KAAP decided in November 2015 to install a melting and casting line and two forging presses. Mass production is scheduled to begin in summer 2017. When this capital investment is completed, KAAP will have three melting and casting lines and eight forging presses. Production capacity will increase from the current 540,000 pieces per month to 750,000 pieces per month.

In the latest expansion plan announced today, KAAP plans to invest approximately US$53 million (about 5.8 billion yen) to install an additional melting and casting line and two forging presses. Startup is to begin in stages starting from autumn 2018, with completion slated for early 2019. KAAP anticipates hiring 100 more people.

When the latest capital investment is completed, KAAP will have a total of four melting and casting lines and 10 forging presses. Production capacity will increase to 970,000 pieces per month, and employees are anticipated to total 600 people.

KAAP was established in 2003 as a joint venture by Kobe Steel, Mitsui & Co., Ltd. and Toyota Tsusho Corporation to produce aluminum forged suspension products in the United States. Ever since it began production in 2005, KAAP has maintained the top share of the North American market for aluminum forged suspension products.

The United States is the world’s second-largest automobile market, and car production is anticipated to continue growing. Production of approximately 17.5 million cars in 2016 is projected to increase to 19 million cars in 2020.

Owing to their light weight, aluminum forged suspensions contribute to improving the fuel economy of cars. Demand has been rising due to the increasing need to reduce the weight of car bodies in response to environmental regulations.

KAAP began by supplying mainly Japanese automakers in the United States. It now supplies U.S. automakers, too. KAAP anticipates that in the future automakers will use aluminum forged suspension products in a wider range of vehicles.

This latest expansion will further contribute to solidifying KAAP’s position in the North American market for aluminum forged suspension products.

Outline of Seventh Expansion

Extension of building:
About 13,000 sq m (140,000 sq ft)
Equipment:
1 melting and casting line, 2 forging presses, auxiliary equipment
Investment amount:
About $53 million
No. of employees to be hired:
About 100 (when in full operation)
Start-up of equipment:
To begin in stages from autumn 2018

Overview of Capital Investment Plans

  Current Ongoing Expansion Plan Latest Expansion Plan After Completion
Land area 130,000 sq m
(1,399,000 sq ft)
120,000 sq m
(1,292,000 sq ft)
--- 250,000 sq m
(2,691,000 sq ft)
Buildings 22,000 sq m
(236,800 sq ft)
11,000 sq m
(118,400 sq ft)
13,000 sq m
(140,000 sq ft)
46,000 sq m
(495,200 sq ft)
Melting & casting lines 2 1 1 4
Forging presses 6 2 2 10
Production capacity (pieces per month) 540,000 +210,000 +220,000 970,000

Profile of Kobe Aluminum Automotive Products, LLC

Location:
Bowling Green, Kentucky, USA
Established:
May 2003
President:
Toshihiro Katsura
Employees:
About 500 (as of March 2017)
Capital:
US$24 million
Shareholder composition:
Kobe Steel, Ltd. 60%
Mitsui & Co., Ltd. 25%
Toyota Tsusho Corporation 15%

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